Cash is still king even as digital payments are set to rise, according to PayPal's CTO
Despite the prevalence of digital payments, most companies in that sector are still competing with cash, according to Sri Shivananda, chief technology officer at PayPal.
People still prefer cash because it's easier than either obtaining a credit card or using a digital payments platform in many places.
There are three things that payments companies must do to convince people to make the jump from using cash to digital payments, according to Shivananda.
Cash still matters, and it won't go away anytime soon, according to the chief technology officer at PayPal.
Many companies are trying to create a digital payments economy, but they face stiff competition from regular currencies, according to Sri Shivananda, senior vice president and chief technology officer at PayPal.
"The competition is cash," Shivananda told CNBC in an interview last month. "It's not even, like, you're fighting for each other's volumes. It's actually cash."
Cash is still king in the digital era
"Reports of the death of cash have been greatly exaggerated," San Francisco Fed President John Williams wrote in a blog post. "In most countries, demand for notes and coins is strong and shows no signs of slowing down."
Economic factors, fluctuating interest rates and even natural disasters can cause demand for dollars to increase. Around the world, the dollar is seen as a safe currency to hold at times of political and economic turmoil.
But cash of all kinds is growing, not just dollars. Williams found that in 40 of 42 major economies -- from Europe and Asia to Latin America and the United States -- the growth of cash circulation outpaced economic growth over the last 10 years.
The San Francisco Fed's findings are backed up by the private sector. Today, 83% of global transactions are in cash, according to Western Union, the payment transfer service.
South-East Asia: cash comes to the rescue of e-commerce
According to the State of e-Commerce in Southeast Asia 2017 White Paper, published by online shopping aggregator iPrice, cash is an important part of the online payments mix in South East Asia.
The report states that Cash on Delivery is offered by more than 80% of the players in both Vietnam and the Philippines. In Thailand, it is available at over 50% or e-tailers and in Indonesia over 40%.
Interestingly, in markets with high credit card penetration such as Singapore or Malaysia, almost 20% of online stores offer Cash on Delivery.
2017 has been a vital year for eCommerce in Southeast Asia, with Gross Merchandise Value of first-hand goods exceding $10B, up from $5.5B in 2015, with a 41% Compound Annual Growth Rate (CAGR) over the past couple of years, as per Google-Temasek’s eConomoy Spotlight SEA Spotlight 2017 report. Behind these figures, there are thousands of eCommerce players of all shapes and sizes, operating across the region in very different market conditions.